4Front Technologies, Inc. Announces Fourth Quarter and Year-end Results.Business Editors LONDON--(BUSINESS WIRE)--March 29, 2000 4Front Reports Strong Fourth Quarter Operating Performance 4Front Takes Actions to Accelerate its European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. e-Business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. Expansion Actions Expected to Boost Next Year's Earnings 4Front Technologies, Inc. ("4Front") (NASDAQ/EASDAQ Symbol: FFTI FFTI Federazione Field Target Italia (Italian) FFTI Feel Free to Ignore ) today announced its results for the fourth quarter and year ended January January: see month. 31, 2000.
HIGHLIGHTS(a)
(in $'000's, except share and per share data)
Fourth Quarter Ended Jan. 31, 2000
---------------------------------- % Increase/
2000(1) 1999 (Decrease)
------- ---- ----------
(unaudited) (unaudited)
Service revenues $ 61,985 $ 37,753 64%
Product revenues 9,183 $ 19,379 (53)%
------- ------ ----
Total revenues 71,168 $ 57,132 25%
Operating income $ 4,113 $ 3,150 31%
Net income $ 1,403 $ 1,876 (25)%
Net income
per share (basic) $ 0.12 $ 0.18 (33)%
Net income
per share (diluted) $ 0.11 $ 0.16 (31)%
Diluted shares
outstanding 12,938,860 11,854,798
Year Ended Jan. 31, 2000
------------------------ % Increase/
2000(1) 1999 (Decrease)
------- ---- ----------
(unaudited) (audited)
Service revenues $185,722 $ 93,849 98%
Product revenues $ 67,156 $ 55,048 22%
------- ------ --
Total revenues $ 252,878 $148,897 70%
Operating income $ 15,727 $ 9,393 67%
Net income $ 7,880 $ 5,822 35%
Net income
per share (basic) $ 0.72 $ 0.64 13%
Net income
per share (diluted) $ 0.67 $ 0.56 20%
Diluted shares
outstanding 11,837,964 10,484,152
(a) A substantial part of the company's growth in the past four years has been achieved through acquisition. Accordingly, the results of operations from period to period are not necessarily comparable. (1) Operating and net income figures exclude a non-recurring charge and a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain on a business disposal. For the fourth quarter ended January 31, 2000, total revenues increased 25% to $71.2 million versus $57.1 million reported for the comparable year-ago quarter. Net income for the quarter (excluding non-recurring items) was $1.4 million, or $0.11 per share diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. (based on 12,938,860 shares), versus net income of $1.9 million, or $0.16 per share diluted (based on 11,854,798 shares), for the comparable year-ago quarter. On December December: see month. 2nd, 1999, 4Front announced a strategic investment to enter the rapidly growing e-business services market. As anticipated, the Company's investment adversely affected net income and earnings per share for the fourth quarter. For the year ended January 31, 2000, total revenues increased 70% to $252.9 million versus $148.9 million for the previous year. Net income for the year (excluding non-recurring items) increased 35% to $7.9 million, or $0.67 per share diluted (based on 11,837,964 shares), versus net income of $5.8 million or $0.56 per share diluted (based on 10,484,152 shares) for the previous year. A non-recurring charge of $10.5 million was taken in the fourth quarter to cover reorganisation Noun 1. reorganisation - the imposition of a new organization; organizing differently (often involving extensive and drastic changes); "a committee was appointed to oversee the reorganization of the curriculum"; "top officials were forced out in the cabinet costs associated with the acquisition and integration of CVSI, and includes the elimination of duplicative du·pli·cate adj. 1. Identically copied from an original. 2. Existing or growing in two corresponding parts; double. 3. logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. , administrative and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services , as well as global property rationalisation Noun 1. rationalisation - (psychiatry) a defense mechanism by which your true motivation is concealed by explaining your actions and feelings in a way that is not threatening rationalization . A one-time gain of $2.3 million was made on the disposal of the Hammer hammer Tool for pounding or delivering repeated blows. Hand hammers have a handle and striking head. Surfaces of hammerheads vary in size, angle of orientation to the handle (parallel or inclined), and type of face (flat or convex). distribution business. The reported net loss for the fourth quarter after non-recurring items was $6.4 million, or $0.60 per share diluted. The reported net income for the year after non-recurring items was $.05 million, or $.00 per share diluted. European e-business Acceleration: In the short time since announcing its e-business initiative last December, 4Front has: - Acquired IT services companies, SIL and CVSI. - Disposed of the Hammer product distribution business. To increase its European e-business services market share, 4Front is undertaking a reorganisation programme that will establish a more effective foundation from which the company can rapidly accelerate its European e-business presence. The programme will involve both increasing and accelerating 4Front's investment in e-business activities and streamlining overall operating costs operating costs npl → gastos mpl operacionales and business activities. Associated reorganisation costs will result in one-time charges totalling up to $15 million in the first half of the current year. In conjunction with the reorganisation programme, 4Front aims to deploy its e-business services and training in the UK, Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. and France more rapidly and to reduce its involvement in lower margin services and services whose growth potential is limited. As a result of these actions, 4Front has revised its forward revenue and earnings per share targets to reflect both the expected cost savings and anticipated increase in higher margin e-business revenue. The Company now expects e-business to be approximately 20% of revenues by the end of next year and 50% by the end of 2003. Following these actions, next year's earnings and margins are expected to be enhanced materially. Anil Doshi This article is about the Indian surname. For the Japanese village, see Doshi, Yamanashi. Doshi is a fairly common surname in India. While the roots can be traced back a few hundred years, the origin of the name is still a matter of much dispute. , Chairman and Chief Executive of 4Front said: Overall Performance and Targets "During the year 4Front experienced rapid growth and development. We hit our $250 million run-rate target well ahead of schedule and achieved record revenue for the year. Earnings in the quarter and year before non-recurring items were ahead of our targets. Furthermore, we achieved our targets despite the significant recent depreciation of European currencies against the dollar. In the fourth quarter, service revenues accounted for over 87% of revenues, again above our 75% target and ahead of schedule. Our service revenue run rate is now over 90% of total revenues. While our principal focus remains on the European market, our US presence is assisting us with the development of new technological partnerships, such as the one we announced with Red Hat. During the year, 4Front continued its move up the IT services value chain. In December of last year we announced the launch of major new e-business initiatives. Our two principal areas of focus in the past few months have been the implementation of these initiatives and the integration of the CVSI acquisition. While good progress has been made in both these areas, we are now seeking to more aggressively transform 4Front's business model and gain e-business market share. We have already established 4Front as a leading provider of IT services in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . Our new goal is to establish 4Front as a leading pan-European
provider of e-business services and solutions. As a result of the
actions we announced today, we now plan for e-business activities to
account for over 20% of revenues by the end of next year and expect them
to account for at least 50% of revenues by the end of 2003. These
increased targets reflect both the rapid growth of the electronic
economy in Europe and 4Front's long-stated aim to work for margin
improvement.With the benefit of the integration and other operational improvement work now going on, we believe that our strong customer base, pan-European network, strong skill sets, high quality service record and motivated mo·ti·vate tr.v. mo·ti·vat·ed, mo·ti·vat·ing, mo·ti·vates To provide with an incentive; move to action; impel. mo workforce will enable us to take full advantage of the technological revolution taking place in the European market. Balance Sheet and Cash 4Front's balance sheet and cash position remain strong. 4Front had overall cash of $20.2 million at the end of the fourth quarter, or $1.72 per share. Borrowings did rise in the fourth quarter following the acquisition of CVSI, which was paid for through bank financing. 4Front, however, benefited from receiving the sales proceeds for its product distribution business. Overall, 4Front remains well-placed to continue to pursue its growth strategy." Mark Ellis Mark Ellis is the name of:
Highlights and Outlook "Amongst the highlights and key achievements of the past year and subsequently, were: E-Business - Acquired IT services companies, SIL and CVSI. - Disposed of the Hammer product distribution business. Overall Business Development - Acquired IT services companies, SIL and CVSI. - Disposed of the Hammer product distribution business. Contracts - Expanded number of $1 million annual contracts to over 50. Acquisitions/Disposals - Acquired IT services companies, SIL and CVSI. - Disposed of the Hammer product distribution business. The fourth quarter saw the beginning of a significant shift in 4Front's business with the launch of our new e-business strategy and the completion of the CVSI acquisition. Our e-business initiatives have had an excellent start. Good progress has been made in terms of orders, industry partnerships and our "E-cademy" training initiatives. E-business customer interest and management enthusiasm in all areas of activity are very strong. In light of this excellent start, we are accelerating and increasing the e-business investment programme this year. We are raising our targets for personnel recruitment and are planning a more rapid roll-out and expansion of our e-business and e-training activities in the UK, Sweden, Germany, Italy, France and other countries to follow. A key aim of the programme is to enable 4Front to more aggressively seek market share in the rapidly developing European market. In the fourth quarter we commenced the integration of CVSI. Actions taken under the integration process include the elimination of duplicative logistics, administrative and support services, and global property rationalisation. While undertaking the CVSI integration process, and in the light of our successful e-business initiatives and increased focus on higher-margin activities, we identified other opportunities for streamlining and improving the overall 4Front business. We have undertaken a programme of further organisational changes to reduce overall ongoing operating costs and in particular to reduce 4Front's involvement in the provision of lower margin services or services whose growth potential is limited. Some personnel will be reallocated to higher value network services and e-business activities in consequence of this programme. The combined impact of this increased and accelerated e-business investment programme and further reorganisation work, although dilutive to earnings this year, should be to establish a more effective foundation that 4Front can leverage to become a leading pan-European e-business and higher margin IT service provider with a strong margin and profit outlook from next year. Finally, the overall computer services Data processing (timesharing, batch processing), software development and consulting services. See service bureau, SaaS and ASP. market continues to grow rapidly in Europe, with European companies It may never be fully completed or, depending on its its nature, it may be that it can never be completed. However, new and revised entries in the list are always welcome. This is a list of companies from the countries in the European Union. now beginning to commit greater resources to compete in the "new electronic economy". Industry estimates of e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. growth over the next few years are at extremely high levels. We believe we have taken, and are continuing to take, important steps to ensure that 4Front can focus more effectively on the business areas where most rapid growth is likely and where higher margins can be achieved. We look forward to the future with confidence." The above statements include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on current management expectations. Factors that could cause future results to differ from these expectations include: risks associated with acquisitions, competition and seasonality. Additional factors are described in the Company's reports filed with the Securities and Exchange Commission. 4Front Technologies, Inc., is a leading provider and integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. of information technology, consisting of specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. computer services and web-based solutions, primarily to blue-chip blue chip also blue-chip·per n. 1. A stock that sells at a high price because of public confidence in its long record of steady earnings. 2. An extremely valuable asset or property. 3. corporations throughout Europe. 4Front's services and solutions include help-desk services, education services, network services, e-business and software solutions, and support services. 4Front's customers include General Electric, British Telecom The telephone and communications carrier that provides services in Great Britain and Northern Ireland. It used to be a division of the British Post Office, but was privatized in 1984 under Margaret Thatcher's administration. , Telecom Italia Telecom Italia is formerly a partially state-owned Italian telco. It was once known as SIP, and it has the largest user base in Italy. Telecom Italia also owns shares in Telecom Argentina and Telecom Personal, fixed and cellular networks in Argentina. , Lucent, Computer Sciences Corp., IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Phillips Phil·lips A trademark used for a screw with a head having two intersecting perpendicular slots and for a screwdriver with a tip shaped to fit into these slots. , Nokia Nokia (nō`kēä), town (1996 pop. 26,326), Western Finland prov., SW Finland, on Lake Näsijärvi. It is an industrial community where wood and rubber products are manufactured. , Siemens, Sony SONY Standard Oil of New York (common, but untrue; it's an urban legend) , Cegedim, Renault Re·nault , Jean Louis 1843-1918. French jurist who represented France at The Hague Conference of 1907. He shared the 1907 Nobel Peace Prize. , Pfizer Pfizer Incorporated (NYSE: PFE) is a major research-based pharmaceutical company, which ranks number two in sales The company is based in New York City. It produces the number-one selling drug Lipitor (atorvastatin, used to lower blood cholesterol); the oral antifungal , Paine Webber Paine Webber and Company was an American stock brokerage firm that was acquired by the Swiss bank UBS AG in 2000. The company was founded in 1880 in Boston, Massachusetts, by William Alfred Paine and Wallace G. Webber. , Societe Generale and the UK Ministry of Defence. Additional information on 4Front can be found on the Company's website at www.4fti.com.
4FRONT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three
Months Ended For The Year Ended
Jan. 31, Jan. 31, Jan. 31, Jan. 31,
2000 1999 2000 1999
$ `000's $ `000's $ `000's $ `000's
(unaudited) (unaudited) (unaudited) (audited)
REVENUES
Services $ 61,985 $ 37,753 $185,722 $ 93,849
Products 9,183 19,379 67,156 55,048
------- ------ -------- --------
71,168 57,132 252,878 148,897
------ ------ ------- -------
Cost of Services 33,708 18,448 92,733 44,171
Cost of Products 8,172 16,345 58,351 46,131
------- ------ -------- ------
41,880 34,793 151,084 90,302
------ ------ ------- ------
GROSS PROFIT
Services 28,277 19,305 92,989 49,678
Products 1,011 3,034 8,805 8,917
------- ------- --------- -------
29,288 22,339 101,794 58,595
------ ------ ------- ------
OPERATING
EXPENSES
Selling, general
and
administrative
expenses 22,171 18,147 79,342 45,775
Profit on disposal
of business (2,284) - (2,284) -
Restructuring and
Reorganization 10,530 - 10,530 -
Depreciation 1,431 497 2,720 1,494
Amortization 1,573 545 4,005 1,933
------- -------- ------- -------
Total operating
expenses 33,421 19,189 94,313 49,202
------ ------ ------ ------
INCOME BEFORE
INTEREST AND
INCOME TAXES: (4,133) 3,150 7,481 9,393
Interest income 358 310 1,041 837
Interest expense (1,382) (237) (2,128) (842)
-------- -------- -------- --------
INCOME/(LOSS)BEFORE
INCOME TAXES (5,157) 3,223 6,394 9,388
INCOME TAXES 1,271 1,347 6,345 3,566
------- ------- ------- -------
NET INCOME/(LOSS) $ (6,428) $ 1,876 $ 49 $ 5,822
------- ------- --------- -------
NET INCOME/(LOSS)
PER COMMON
SHARE (Basic) $ (0.60) $ 0.18 $ 0.00 $ 0.64
NET INCOME/(LOSS)
PER COMMON
SHARE (Diluted)$ (0.60) $ 0.16 $ 0.00 $ 0.56
4FRONT TECHNOLOGIES, INC. SELECTED BALANCE SHEET INFORMATION
Jan. 31, 2000 Jan. 31, 1999
(unaudited) (audited)
$ `000's $ `000's
Current assets $ 126,326 $ 109,596
Current liabilities 115,470 86,815
Total assets 206,629 146,272
Long-term debt 20,833 780
Stockholders' equity $ 62,454 $ 58,677
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion